Browsing by Author "Dudey, Marc"

Now showing 1 - 5 of 5
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    Essays on dynamics of consumer choice
    (2004) Dorabialski, Wojciech Janusz; Dudey, Marc
    This dissertation consists of two essays. The first essay is a theoretical study of a dynamic game played between the consumers and a monopolistic seller who can use checkout coupons. The paper shows how checkout coupons can increase the profit of a monopolist, when both the seller and the consumers have private information. Double-sided uncertainty is necessary for the profitability of checkout coupons, but does not guarantee it. Increase in profit comes at a loss of efficiency: the quantity sold decreases. The second essay is an empirical study of the causes and consequences of current trends in the market for passenger vehicles. During the last 30 years, light trucks have become an increasingly popular substitute for a passenger car. The sales and the share of light trucks in the US vehicle fleet has been increasing. We use accident data to show that light trucks are safer than cars, and that the safety advantage increases with their share in the vehicle fleet. We show that this may be the force that drives the popularity of light trucks. Unfortunately, light trucks impose a significant safety externality on other road users. This external cost is greater than the safety benefit to light truck occupants. We estimate that 2086 fatalities could be avoided during the year 1999 if the share of light trucks was lowered to the level that prevailed in the year 1970.
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    Essays on Fair Division and Monopoly Pricing
    (2015-11-10) Li, Jin; Dudey, Marc; Tang, Xun; Veech, William
    The first chapter is based on a paper with Jingyi Xue in fair division problems. In this chapter, we consider the problem of fairly dividing a finite number of divisible goods among agents with the generalized Leontief preferences. We propose and characterize the class of generalized egalitarian rules which satisfy efficiency, group strategy-proofness, anonymity, resource monotonicity, population monotonicity, envy-freeness and consistency. On the Leontief domain, our rules generalize the egalitarian-equivalent rules with reference bundles. We also extend our rules to agent-specific and endowment-specific egalitarian rules. The former is a larger class of rules satisfying all the previous properties except anonymity and envy-freeness. The latter is a class of efficient, group strategy-proof, anonymous and individually rational rules when the resources are assumed to be privately owned. The second chapter is about monopoly pricing with social learning. In this chapter, we consider a two-period monopolistic model in which the consumers who purchase in the first period would reveal the unknown quality of the product through their experiences to the consumers in the second period. Due to this effect, some consumers would strategically choose to delay to the second period in order to take this informational free-ride. We show that there always exists a unique symmetric equilibrium of consumers for each price set by the monopolist. Then we further investigate the seller’s optimization pricing problem. In a range of moderate patience, the seller would be likely to induce the consumers to effectively transmit information. We also discuss the impact of information disclosure on the monopolistic profit.
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    Optimal contracts for trade restrictions
    (1993) Paredes, Esperanza; Dudey, Marc
    This paper addresses the question of how the government should elicit cost information from a high or low domestic industry to determine socially optimal levels of imports. The results are shown to depend on whether firms in the domestic industry are represented by a trade organization. When firms act independently the optimal contract is costless for the government and two different types of incentive constraints are used to determine it. One of these applies when the costs announced by firms coincide. The other applies when one firm reveals a cost structure and its competitor reveals the opposite cost structure. If a contract to elicit cost information is used and trade organizations are the channel of communication between industry and government only one type of incentive constraint is necessary.
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    Pricing and power: Puzzles from the retail food market
    (1998) Murillo, Jose Antonio; Dudey, Marc
    This work documents and analyzes three pricing practices that are common to the retail food industry: quantity surcharges, downward price rigidity and nine-ending pricing. Quantity surcharges happen when food retailers assign higher unit prices to larger packages. Downward price rigidity means that the retailers' response to wholesale decrements is less than proportional than to wholesale increments. Nine-ending pricing refers to the practice of setting the rightmost digit of a price at nine. The findings on the quantity surcharge practice reveal its usage is significant and persistent. The analysis indicates that food retailers may use this strategy to price discriminate among different types of consumers.
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    Symbiotic transfer, arbitrage, and equilibrium
    (1993) Won, Dong Chul; Dudey, Marc
    We lay a unified foundation for a theory of general equilibrium by proving the existence of an equilibrium for a grand model which covers all the well-known general equilibrium models under the convexity and continuity assumptions. The grand model allows an economy to have an extended list of commodities including assets which can be traded on unlimited short sales. The conceptual framework we develop for the existence problem is simple. Consider an economy consisting of two agents. If there were a commodity bundle which is always desirable to one agent and always undesirable to the other agent, the economy could not reach an equilibrium because they can increase their utility through an indefinite give-and-take process. What we need for the existence of an equilibrium is to exclude the presence of commodity bundles that can bring an economy into this state of "economic symbiosis." We proceed further by taking the Closedness Hypothesis that the utility possibility set is compact. The finite dimensional findings do not hold for an economy with an infinite dimensional commodity space so that we investigate under what circumstances the Closedness Hypothesis holds. We develop sufficient conditions for the Closedness Hypothesis to hold and prove the existence of an equilibrium of an infinite dimensional economy under some spanning conditions on consumption sets.